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OFFICE OF

INSPECTOR GENERAL
OFFICE OF INSPECTOR GENERAL $10,110,000

The Appropriations Act that funds the National Science Foundation (NSF) provides for a separate
appropriation heading for NSF's Office of Inspector General (OIG). Accordingly, the FY 2005 Budget
Request identifies the resources needed to support OIG, including amounts for personnel compensation and
benefits, contract services, training, travel, supplies, materials, and equipment.

The FY 2005 Budget Request for OIG is $10.11 million, which represents an increase of $170,000 over the
FY 2004 Estimate of $9.94 million.

Office of Inspector General Funding


(Dollars in Millions)
Change over
FY 2003 FY 2004 FY 2005 FY 2004
Actual Estimate1 Request Amount Percent
Personnel Compensation and Benefits 6.27 7.48 7.60 0.12 1.6%
Other Operating Expenses 2.43 2.46 2.51 0.05 2.0%
Total $8.70 $9.94 $10.11 $0.17 1.7%

Full-Time Equivalent Employment 55 60 60 0 0.0%


1
- FY 2004 Conference mark of $10 million, minus .59% rescission.

OIG Responsibilities

In February 1989, the National Science Board established OIG pursuant to the Inspector General Act
Amendments of 1988. The statute confers on OIG the responsibility and authority to:

• Conduct and supervise audits of NSF programs and operations, including organizations that receive NSF
funding.

• Conduct investigations concerning NSF programs and operations, including organizations that receive
NSF funding.

• Evaluate allegations of research misconduct, such as fabrication, falsification, or plagiarism, involving


individuals who participate in NSF-funded activities.

• Provide leadership, coordination, and policy recommendations for:

- Promoting economy, efficiency, and effectiveness in the administration of NSF programs and
operations, and

- Preventing and detecting fraud and abuse in NSF programs and operations.

• Issue semiannual reports to the National Science Board and Congress to keep them informed about
problems, recommended corrective actions, and progress being made in improving the management and
conduct of NSF programs.

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Office of Inspector General

As set forth in the OIG Strategic Plan, the primary functions of the Office are audits, performance
reviews, and investigations. Reflecting the diverse skills, training, and experience necessary to oversee
NSF’s varied programs, OIG staff includes scientists, attorneys, certified public accountants,
investigators, evaluators, and information technology specialists. The focus of an investigation, audit, or
other review may be on a single entity or individual, an organization, a project involving multiple
disciplines, or a broad program or functional area.

OIG audits grants, contracts, and cooperative agreements funded by the Foundation’s programs. OIG
performs audits and reviews of the operations of both internal agency programs and external
organizations that receive NSF funding to ensure that financial, administrative, and programmatic
activities are conducted economically and efficiently. The Office is also responsible for the audit of the
Foundation’s annual financial statements, which are required for all NSF accounts and activities by the
Government Management Reform Act of 1994. OIG contracts with a public accounting firm to conduct the
financial statements audit, and the cost is allocated proportionately to the accounts audited. In addition to
overseeing the audit, OIG performs systemic audits of financial, budgetary, and data processing systems used
by NSF to develop the financial statements. The Office also performs multidisciplinary reviews of
financial, management, and program operations that identify broader problems and highlight best
practices.

OIG investigates possible wrongdoing by organizations and individuals who submit proposals to, receive
awards from, conduct business with, or work for the Foundation. Allegations of research misconduct are
also investigated. OIG assesses the validity and seriousness of the allegations and recommends
proportionate action. When appropriate, the Office refers the results of these investigations to the
Department of Justice or other authorities for criminal prosecution or civil litigation. OIG refers other
cases to the Foundation for administrative resolution and recommends modifications to agency policies
and procedures. The Office works closely with institutions on the conduct of their internal investigations
and performs outreach activities aimed at preventing and detecting fraud, waste and abuse and at raising
the awareness of funded researchers, institutional administrators, and agency employees about the OIG’s
role and NSF’s rules and expectations.

Personnel Compensation and Benefits and General Operating Expenses


(Dollars in Thousands)

FY 2003 FY 2004 FY 2005


Actual Estimate 1 Request
Personnel Compensation and Benefits 6,270 7,480 7,600
Travel and Transportation of Persons 152 250 275
Advisory and Assistance Services 1,953 1,870 1,875
Communications, Equipment, Other 322 341 360
Total: $8,697 $9,941 $10,110
1
- FY 2004 Conference mark of $10 million, minus .59% rescission

To complement the growth in the NSF budget, OIG has planned a commensurate increase in audits of (1)
organizations that receive NSF funding and (2) agency operations to assess the efficiency, effectiveness, and
integrity of their programs. The budget requested for FY 2005 will allow OIG to continue to focus on NSF
activities that have been identified as priorities, particularly as NSF’s financial exposure grows due to its
efforts to make larger awards that extend over longer periods of time. Approximately 75 percent of the
request is dedicated to OIG personnel costs, with the balance providing funding for continued contract

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FY 2005 Budget Request to Congress

support for audits and investigations, ongoing outreach activities to the research community, and required
upgrades in OIG technological capability.

OIG will maintain its efforts in the areas that the Office has identified as priorities, consistent with the OIG
Strategic Plan and the Management Challenges identified by OIG. The Office’s primary effort has been to
increase audit attention in eight areas that pose the greatest risk to the agency: financial management,
acquisition, information technology, human capital, award administration, awardee financial
accountability and compliance, the management of agency programs and projects, and OMB Circular A-
133 audits. In particular, the Office is focusing on assessments of (1) NSF’s multiyear Business Analysis
contract and workforce plan, which is scheduled to be completed in FY 2005; (2) NSF’s management of
large programs and operations, including Math and Science Partnerships and Polar Operations; (3)
infrastructure projects funded from the Major Research Equipment and Facilities Construction
Appropriation, especially those with international partners; and (4) NSF’s efforts to improve its award
administration and monitoring, with special attention on post-award oversight. Each of these areas has
been identified as a Management Challenge for the agency, and NSF has a number of initiatives under
way to address and improve these critical operations.

Within budgetary limits, OIG will continue to devote some staff time to Quality Control Reviews of non-
federal CPA firms conducting audits for grantees under the Single Audit Act (OMB Circular A-133).
Because NSF relies on these audits as an important element of its post-award monitoring procedures, it is
critical that the quality of the audits be assured. Over the past few years, Quality Control Reviews of the
CPA firms conducting A-133 audits have raised significant concerns about their quality.

In addition, criminal, civil and administrative investigative cases are becoming more complex, resulting in
increased interactions with NSF, awardee administrators, and the Department of Justice. These cases
require more staff time and a higher degree of skilled analysis. With current resources, the Office is
conducting more in-depth analyses of indicators of grant fraud that may be found during audits and other
reviews. Also, the NSF OIG has played a leading role in establishing a peer review process for
investigative activities within the Inspector General community. This process will enhance the quality of
OIG investigations throughout the Government. The NSF OIG also continues its role as the community
leader for investigating misconduct in science and research. Resources used in support of these efforts
enhance the effectiveness of all IG investigative activities.

If the number of investigative cases remains static, the request level would allow the current level of
effort for the OIG’s outreach programs. These help NSF staff, awardee institutions, and researchers
become more aware of the system and grant management problems that OIG has identified and the
preventive or corrective measures that they can take. Both auditors and investigators are needed to
participate in outreach activities. As NSF programs expand in complexity and number, the OIG has seen
an increase in the number of requests for assistance from universities and research institutions. Our
outreach also involves international collaborations and audits. Because international programs are an
integral part of NSF’s portfolio, the OIG has initiated efforts to better understand the accountability and
audit requirements of international partners. These activities are also coordinated with other OIGs to
avoid duplication and to ensure consistency in approaches to issues.

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